The New York Stock Exchange ended in the red on Thursday, weighed down by investor nervousness over growing uncertainties in the Middle East, while also keeping an eye on corporate results.
Following a double record for the Nasdaq and the broader S&P 500 index the day before, they respectively fell by 0.89% and 0.41%. The Dow Jones also slipped by 0.36%.
According to Art Hogan of B. Riley Wealth Management, there is currently “a tug of war between the fundamentals – with results better than expected so far – and the fact that news from the Strait of Hormuz has not improved.”
“Today, it seems that the focus on results has been overshadowed by the rise in energy prices,” he explained to AFP.
Oil prices continued to rise — with Brent above $100 per barrel– due to “disappointment over the failure to reopen the Strait of Hormuz, combined with tense expectations for the upcoming negotiations” between Washington and Tehran, as stated by Carsten Fritsch from Commerzbank.
US President Donald Trump stated Thursday that he has “all the time in the world” in the Middle East conflict, where the ceasefire in place for the past two weeks between Tehran and Washington seems to be hanging by a thread.
Iranian media reported explosions in Tehran, and the Israeli Defense Minister stated readiness to resume war, although a security source in the country told AFP that the army was not attacking Iran.
“Bond borrowing rates and oil remain at uncomfortably high levels,” highlighted Adam Turnquist from LPL Financial.
The 10-year yield on US Treasury bonds, the benchmark rate, increased to 4.32% from 4.30% the previous day.
Analysts from Briefing.com believe that the decline in stock indices should be put into perspective.
“The Nasdaq had risen by 14.2% over the month before today’s session; so, it is not exaggerated to say that it was vulnerable to some profit-taking,” they noted.
Another point of interest for investors is the quarterly performances of companies which have caused movements.
Electronic components specialist Texas Instruments soared by over 20% to $282.23.
Following better-than-expected results in the first three months of the year, the company expects its earnings per share this quarter to range between $1.77 and $2.05, compared to the $1.57 estimated by analysts.
Briefing.com analysts see this as a “generalized strength” and “a new momentum” for Texas Instrument.
Software publisher ServiceNow (-17.59% at $84.94) stumbled despite a 22% increase in revenue in the first quarter (year on year). Its net profit slightly increased during the period, but the company indicated facing “headwinds” from the Middle East, with the war delaying the conclusion of some contracts.
Following its performance, Adobe fell by 6.63% and Oracle by 5.98%.
Despite better-than-expected results, electric vehicle specialist Tesla was penalized for its increasingly high spending forecasts, estimated at $25 billion this year.
Its stock fell by 3.56% to $373.72.
As for indicators, weekly jobless claims came in slightly above expectations, but “it should be acknowledged that the claims remain very low compared to historical standards,” according to Samuel Thombs from Pantheon Macroeconomics.
